The Bank of Thailand should be more responsive to the government and should not be too independent, according to former Prime Minister Thaksin Shinawatra on Thursday night, as he spoke during a conversation session at a gala dinner with Forbes Media, as a part of the “Forbes Global CEO Conference: New Paradigms”.
As most of the staff of the central bank are Grade-A students and first-rate economists, he said that they believe that they are the best, which is not true because they must have experiences as well.
The central bank’s responsibility is to maintain the stability of the baht currency and to regulate commercial banks, said Thaksin, adding that he feels the central bank is too protective of commercial banks, to the extent that they no longer help problematic customers.
He also alleged that the central bank has been absorbing liquidity from commercial banks, making it difficult for businesses to gain access to funding and forcing the government to resort to stimulus packages, such as the “digital wallet” scheme, to inject money into the economy.
He likened the digital wallet scheme to a fish in a pond full of water, where the fish can lay eggs, but, if the pond is dry, the fish will not be able to lay.
Thaksin disclosed that the government’s economic advisory team is considering a plan to issue ‘Stable Coin’, backed by government bonds, to boost liquidity in the economy.
The team is also working on tax reforms, to cut personal income and corporate taxes, to make Thai products more competitive, while increasing VAT.
As far as consumer products are concerned, Thaksin said Thailand cannot compete with China because Chinese products are cheap, but he urged the government to protect Thai SMEs by imposing taxes on online businesses and banning online shopping apps which avoid taxation.
The former prime minister said that, in the next five years, Thailand must rely on a creative economy and data centres as the main engines of growth and prosperity.
